Thursday, January 31, 2008

Digital Revolution Devalues Content: Analysts

Reducing content down to its digital roots and distributing perfect copies to multiple points sure poses a challenge to the monetization process. The music business was first to feel the effects and video content producers must have been asleep at the wheel to not anticipate that it would overtake them as well. And now that the DVR is out of the box, it will be hard to contain or limit it, despite tries to disable certain trick features like fast forwarding through commercials.

Distribution models will be turned upside down as streaming enables all broadband users to access product. Established networks will be limited only by their contracts with current distribution platforms to compete effectively in this new world. License fees may see themselves replaced by subscriptions and TV may become simply a monitor in the home, attached to the web.

As companies deal with this digital slippery slope, opportunities will also arise for sites that best aggregate and recommend and find appropriate content quickly and easily. And monetization opportunities will open up as others close down - through subscription, targeted promotion, interactive, branded entertainment, product placement, and other sources on this new content platform. Cable bills may decline as broadband rates rise; some networks may fall or merge into others, and other niche networks broaden. But at the end, change is inevitable and we must take the bad with the good and maximize its potential. Their is still value to the content, it just needs to be monetized in different ways.